Could GST cut mean drop in tips?

BY ELYSE AMEND

elyse.amend@transcontinental.ca

While the one per cent general sales tax cut that was implemented by the federal government on Jan. 1 might be saving consumers some money at the cash register, some people working in the restaurant business are worried it might be costing them at the end of the day.

“Many people depend on the taxes when they figure the tip,” said Emilie, a waitress at a popular Italian restaurant in Kirkland. While leaving a 15 per cent tip is not mandatory, it is an unwritten rule to leave this amount for satisfactory service. She said she has noticed a drop in her tips since the GST was lowered from six to five per cent – reducing the total GST and QST rate from 14 to 13 per cent – and believes people are just not aware of it. “For example, on this bill that I have in my hands here, it was $37.82 and they left $5. Normally, it would have been $1 or $2 more.”

While those amounts may not sound significant, Emilie said it adds up over the course of a night, especially since her tips are taxed about eight per cent.

“It can make a difference of at least $20 a day,” she said. “I’ve become more aware of it now, especially because I have more things to pay for.”

While university student Mathieu, who works full-time at a sports bar and restaurant in Dorval, said it is hard to tell whether the GST cut has really affected tips, he said he does notice people use the GST and QST to calculate what they are going to leave.

“You can tell there are always some people who use the taxes as the basis or the reference point. But even when it was at 14 per cent, people would, in general, round down, so you wouldn’t get the full 14 per cent,” he said. “It would be nice for the people to know, but at the same time I can’t complain too much, because I do make a good amount on tips.”

Jean Lefebvre of the Conseil des chaînes de restaurants du Québec (CCRQ) said it is too early to tell whether the GST cut has affected tips. However, speaking as a consumer, he said there are many factors, ranging from quality of service all the way to the state of the economy, that determine how much tip people leave.

“The key in our industry is, the less money you have in your pocket, the first thing that goes is -- not doing the groceries -- but it’s going to the restaurants,” he said. “I’m not saying it (the GST cut) is not part of the deal, but there are a lot of things that are much more costly these days that would have you thinking about leaving less tip, or even staying at home.”

Whether or not the cut has had anything to do with the drop she has seen, Emilie hopes restaurant-goers will think twice before leaving the tip.

“People need to realize it’s our salary,” she said, adding her tips usually add up to the same amount she makes with her minimum wage base rate. “If I wouldn’t be working as a waitress, I probably would depend on the taxes too. I’m aware of it. It might seem like just one per cent, but at the end of the day, it really adds up.”